If the capital asset is destroyed in the fire accident, can the same be allowed as business expenditure. There is no insurance policy. The assets are purchased two years back.
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Capital Asset destroyed in fire accident
Replies (3)
ya i think it will be allowed as business loss.... but wait for expert's answer
The cost of asset destroyed, when there is no insurance claim, shall be a capital loss i.e. is dead loss with no tax treatment.
The depreciation block will be reduced by the WDV of the asset minus the scrap value realised if any. If the entire block is wiped out, then it will be a Short Term Capital Loss u/s 50. Cannot be debited in the P & L Account.
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